Freelancer International Pty Limited v. Upwork Global, Inc.

Background

Freelancer Technology Pty Limited and Freelancer International Pty Limited sued Upwork Inc. and Upwork Global Inc. The complaint asserted ten causes of action, including federal trademark infringement, counterfeiting, federal and California unfair competition, common-law trademark infringement, trade-name infringement, tortious interference with prospective economic advantage, a California anti-phishing claim, and false advertising.

Freelancer Technology held a federally registered and incontestable “FREELANCER” word mark for specified goods and services. Freelancer International offered a “Freelancer — Hire & Find Jobs” application and held a license from Freelancer Technology to use the mark. Upwork offered separate applications for clients and freelancers. After download, Upwork’s freelancer application displayed “Freelancer” on iOS devices and “Freelancer-Upwork” on Android devices. Plaintiffs also challenged certain Upwork notifications and account language using the word “Freelancer.”

Plaintiffs sought a preliminary injunction, meaning an order providing temporary relief while the case proceeds. They asked the court to restrain Upwork from distributing or servicing software, or identifying user accounts, using the “FREELANCER” mark for goods and services listed in the registration. Plaintiffs clarified that they were not challenging uses of “freelancer” on Upwork’s website to identify workers or referential uses such as “Upwork for freelancers.”

Analysis

To obtain a preliminary injunction, plaintiffs had to make a clear showing that they were likely to succeed on the merits, likely to suffer irreparable harm without relief, that the balance of equities favored them, and that an injunction would serve the public interest.

The court focused on Upwork’s fair-use defense. For an incontestable trademark, fair use can protect a defendant’s use of a term, other than as a mark, when the term is descriptive and used fairly and in good faith to describe the defendant’s goods or services. Upwork argued that it used “freelancer” in its ordinary meaning to describe the users for whom its application was intended, relied on its own “Upwork” branding, and did not use “Freelancer” as a source-identifying trademark.

The court found that Upwork’s challenged uses were proper descriptive uses of a common word distinguishing its freelancer application from its client application. The court was not persuaded that capitalization or bold type showed trademark use, particularly because Upwork’s distinctive logo or coloring appeared alongside the challenged uses. The court also noted that Upwork did not list “Freelancer” among its publicly listed trademarks, use a stylized font, or use a “TM” symbol with the word.

Based on the current record, the court found that Upwork used “freelancer” in good faith to describe its users and that the use satisfied the fair-use defense. Plaintiffs therefore were not likely to succeed on the federal trademark infringement claim or the other claims addressed as dependent on allegedly unlawful trademark or counterfeiting conduct. The court also concluded that plaintiffs were unlikely to succeed on counterfeiting when the applications were viewed in their entirety, without deciding the specific level of similarity between them.

The court separately found that plaintiffs had not shown likely irreparable harm. Plaintiffs estimated that as many as 1,800 users per day, or 56,000 users per month, could be diverted to Upwork, but they presented no evidence of actual losses. The court found the alleged losses highly speculative, noting the applications’ distinct logos, the fact that the disputed names appeared only after users chose to download the applications, and plaintiffs’ lack of objection to the titles as displayed in the app stores. The court likewise found it unlikely that Upwork users would be confused about the source of notifications after downloading and registering with Upwork.

Rulings

The court denied plaintiffs’ motion for a preliminary injunction.

The court granted defendants’ motion for additional time to respond to the complaint. Defendants’ responsive pleading was due on or before November 13, 2020.

The court granted plaintiffs’ request for permission to file a further reply and considered that filing. On the motion to strike, the court struck specified portions of a declaration, denied the motion to strike as to other specified paragraphs and exhibits, and denied plaintiffs’ request to remove the declaration’s author from the matter as an attorney.

The order did not enter final judgment on the underlying claims; it ruled on temporary relief and related procedural requests.